3
8K.DOC
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8_K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: February 12, 1996
U S WEST, Inc.
<TABLE>
<CAPTION>
<S> <C> <C>
A Delaware Commission File IRS Employer Identification
Corporation Number 1-8611 No. 84-0926774
</TABLE>
7800 East Orchard Road, Englewood, Colorado 80111
Telephone Number (303) 793_6500
<PAGE>
Item 7. Exhibits
Exhibit Description
27 Financial Data Schedule.
99A Press Release issued February 12, 1996 concerning the earnings results
of U S WEST Communications Group for the year ending December 31, 1995.
99A.1 Unaudited Combined Statements of Income of U S WEST Communications
Group for the quarters and years ended December 31, 1994 and December
31, 1995, filed in connection with the Press Release dated February 12,
1996.
99A.2 Unaudited Selected Combined Group Data of Company for the quarters
and years ended December 31, 1994 and December 31, 1995, filed in
connection with the Press Release dated February 12, 1996.
99A.3 Unaudited Combined Balance Sheets of U S WEST Communications Group
for years ended December 31, 1994 and December 31, 1995, filed in
connection with the Press Release dated February 12, 1996.
99A.4 Unaudited Combined Statements of Cash Flows of U S WEST
Communications Group for the years ended December 31, 1994 and December
31, 1995, filed in connection with the Press Release dated February 12,
1996.
99A.5 Unaudited Statements of Income of U S WEST Communications Group for
the quarters and years ended December 31, 1994 and December 31, 1995,
filed in connection with the Press Release dated February 12, 1996.
99A.6 Unaudited Consolidated Statements of Income of U S WEST, Inc. for
the quarters and years ended December 31, 1994 and December 31, 1995,
filed in connection with the Press Release dated February 12, 1996.
99A.7 Unaudited Consolidated Balance Sheets of U S WEST, Inc. for the
years ended December 31, 1994 and December 31, 1995, filed in connection
with the Press Release dated February 12, 1996.
99A.8 Unaudited Consolidated Statements of Cash Flows of U S WEST, Inc.
for the years ended December 31, 1994 and December 31, 1995, filed in
connection with the Press Release dated February 12, 1996.
99B Press Release issued February 12, 1996 concerning the earnings results
of U S WEST Media Group for the year ending December 31, 1995.
99B.1 Unaudited Combined Statements of Income of U S WEST Media Group for
the quarters and years ended December 31, 1994 and 1995, filed in
connection with the Press Release dated February 12, 1996.
99B.2 Unaudited Selected Combined Group Data of U S WEST Media Group for
the quarters and years ended December 31, 1994 and December 31, 1995,
filed in connection with the Press Release dated February 12, 1996.
99B.3 Unaudited Combined Balance Sheets of U S WEST Media Group for the
years ended December 31, 1994 and December 31, 1995, filed in connection
with the Press Release dated February 12, 1996.
99B.4 Unaudited Combined Statements of Cash Flows of U S WEST Media Group
for the years ended December 31, 1994 and December 31, 1995, filed in
connection with the Press Release dated February 12, 1996.
99B.5 Unaudited Selected Proportionate Data of U S WEST Media Group for
the quarter ended December 31, 1995, filed in connection with the Press
Release dated February 12, 1996.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
U S WEST, Inc.
/s/ STEPHEN E. BRILZ
By:___________________________
Stephen E. Brilz
Assistant Secretary
Dated: February 12, 1996
U S WEST COMMUNICATIONS GROUP 1995 EARNINGS
3
<PAGE> 1
EXHIBIT 99A
Release Date: February 12, 1996
Contact: Becky Winning (303) 793-6367
Lois Leach (303) 793-6355
U S WEST COMMUNICATIONS GROUP REPORTS STRONG REVENUE GROWTH AND RECORD
TELEPHONE ACCESS LINE GROWTH
ENGLEWOOD, Colo. - U S WEST Communications Group (NYSE:USW) today reported
strong growth in revenue and record growth in telephone access lines for the
year ending Dec. 31, 1995. However, as expected, aggressive investments in
improving customer service limited growth in earnings for the year.
Operational highlights for the year include:
- - REVENUES of $9.5 billion, an increase of 3.4 percent compared with 1994.
Revenue growth was driven by strong sales of new products, improved
market penetration of value-added services and record growth in access
lines.
- - EBITDA -- earnings before interest, taxes, depreciation and amortization
-- of $4.2 billion, an increase of 4.8 percent compared with the prior year.
- - REPORTED NET INCOME of $1.2 billion, up 2.3 percent compared with the
same period a year ago. Income includes gains associated with the sale of
selected rural telephone exchanges, expenses associated with the creation of
targeted stock and extraordinary charges related to the early retirement of
debt. Adjusted to exclude these one-time items, net income was $1.1 billion,
an increase of 0.7 percent compared with 1994 net income (adjusted for the
sale of rural exchanges.)
- - REPORTED EARNINGS PER SHARE (EPS) of $2.50 for the year, down 1.2
percent from $2.53 for the same period a year earlier. EPS includes a gain
of 18 cents per share associated with the sale of selected rural exchanges
and expenses of 3 cents per share related to the creation of targeted stock
and extraordinary after-tax charges related to the early retirement of debt.
Adjusted to exclude these one-time items, EPS was $2.35, down 2.9 percent
from 1994 EPS (adjusted for the sale of rural exchanges) of $2.42.
The decline in EPS is primarily the result of the issuance of
approximately 13 million additional shares during December, 1994.
- - SUBSCRIBER GROWTH - The number of telephone access lines served in U S
WEST Communications Group's 14-state region increased to 14.8 million.
Excluding the sale of selected rural telephone exchanges, the number of
access lines increased 4.2 percent compared with 1994. This is the highest
annual access line growth rate in the history of the company.
- - MINUTES OF USE, an indicator of long-distance calling volume, grew by
9.6 percent compared with the prior year. This is the fourth consecutive
year that the growth rate for minutes of use has increased.
"Our 1995 results demonstrate our ability to drive strong top-line growth,"
said Sol Trujillo, president and CEO of U S WEST Communications Group. "They
also reflect our intense commitment to meeting the changing needs of our
customers.
"Net income was affected by higher expenses related to contract labor and
overtime as we worked to enhance customer service and accommodate strong
growth in our region," Trujillo noted. "However, thanks to these concerted
efforts, service is improving, and we intend to reduce contract and overtime
expenses in 1996.
"These results also underscore the unique geographic and demographic
attributes of our region," Trujillo said. "Our growth is spread throughout
our 14-state territory and the majority of our access line growth came from
outside our top-five metro areas.
"We continue to see accelerating demand for additional lines, vertical
services and high-speed data-services throughout our territory, and we intend
to capitalize on continued growth in 1996," he added.
Other U S WEST Communications Group highlights for the year include:
- Revenues from !NTERPRISE, the company's high-speed data networking
services, nearly doubled in 1995 to more than $100 million.
- - Revenues from CLASS services, such as Caller ID and Call Waiting,
more than doubled in 1995 and revenues from Voice Messaging Services
increased nearly 30 percent. Combined revenue for these services totaled
nearly $200 million for the year. At year-end, penetration rates for Caller
ID, Call Waiting and Voice Messaging Services were 12.3 percent, 33.2
percent and 12.7 percent, respectively.
- - TeleChoice (Registered Trademark), an interactive cable TV platform
currently being tested in Omaha, captured a 30-percent share of cable homes
in the test area in only four months. This demonstrates the strength of the
U S WEST brand in competitive situations in new markets.
U S WEST Communications Group provides telecommunications and high-speed data
services to more than 25 million customers in 14 western and midwestern
states. The company is one of two major groups that make up U S WEST. U S
WEST is in the connections business, helping customers share information,
entertainment and communications services in local markets worldwide. U S
WEST's other major group, U S WEST Media Group (NYSE:UMG), is involved in
domestic and international cable and wireless networks, directory publishing
and interactive multimedia services.
U S WEST Media Group also released year-end results today.
# # #
<PAGE> 1
EXHIBIT 99A.1
COMBINED STATEMENTS OF INCOME U S WEST COMMUNICATIONS GROUP
(UNAUDITED)
<TABLE>
<CAPTION>
Quarter Ended Year Ended
December 31, % December 31, %
In millions 1995 1994 Change 1995 1994 Change
- ------------------------------ ------- -------------- ------- -------
OPERATING REVENUES
<S> <C> <C> <C> <C> <C> <C>
Local service $1,113 $1,032 7.8 $4,344 $4,067 6.8
Interstate access 604 578 4.5 2,378 2,269 4.8
Intrastate access 189 188 0.5 747 729 2.5
Long-distance network 298 310 (3.9) 1,189 1,329 (10.5)
Other services 235 218 7.8 826 782 5.6
---------------- ----------------
Total operating revenue 2,439 2,326 4.9 9,484 9,176 3.4
---------------- ----------------
OPERATING EXPENSES
Employee-related 862 804 7.2 3,341 3,215 3.9
Other operating 444 424 4.7 1,543 1,547 (0.3)
Taxes other than
income taxes 74 87 (14.9) 380 388 (2.1)
Depreciation & amort. 528 488 8.2 2,042 1,908 7.0
---------------- ----------------
Total operating
expenses 1,908 1,803 5.8 7,306 7,058 3.5
---------------- ----------------
Income from operations 531 523 1.5 2,178 2,118 2.8
Interest expense 112 99 13.1 427 376 13.6
Gain on sales of rural
telephone exchanges 24 34 (29.4) 136 82 65.9
Other expense - net 11 - - 41 21 95.2
---------------- ----------------
Income before income
taxes and extraordinary
item 432 458 (5.7) 1,846 1,803 2.4
Income taxes 148 159 (6.9) 662 653 1.4
---------------- ----------------
Income before extra-
ordinary item 284 299 (5.0) 1,184 1,150 3.0
Extraordinary item:
Early extinguishment
of debt, net of tax (3) - - (8) - -
---------------- ----------------
NET INCOME $281 $299 (6.0) $1,176 $1,150 2.3
================ ================
</TABLE>
<PAGE> 2
EXHIBIT 99A.1 (cont'd.)
COMBINED STATEMENTS OF INCOME U S WEST COMMUNICATIONS GROUP
(UNAUDITED)
<TABLE>
<CAPTION>
Quarter Ended Year Ended
In millions, except December 31, % December 31, %
per share amounts 1995 1994 Change 1995 1994 Change
- ------------------------------ ------- -------------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Pro forma average common
shares outstanding (#1) 472.6 460.1 2.7 470.7 453.3 3.8
================ ================
Pro forma earnings
per common share: (#1)
Income before $0.60 0.65 (7.7) $2.52 2.53 (0.4)
extraordinary item
Extraordinary item (0.01) - - (0.02) - -
---------------- ----------------
Pro forma earnings
per common share $0.59 $0.65 (9.2) $2.50 $2.53 (1.2)
================ ================
<FN>
<F1>
#1: Effective November 1, 1995, each share of U S WEST, Inc.
common stock was converted into one share each of U S WEST Communi-
cations Group common stock and U S WEST Media Group common stock.
Earnings per common share have been presented on a pro forma basis
to reflect the two classes of stock as if they were outstanding
since January 1, 1994. For periods prior to the recapitalization
the average common shares outstanding used in the earnings per
average common share for the two classes of stock are assumed to
be equal to the average common shares outstanding for U S WEST,Inc.
</FN>
</TABLE>
<PAGE>
EXHIBIT 99A.2
SELECTED COMBINED GROUP DATA U S WEST COMMUNICATIONS GROUP
(UNAUDITED)
<TABLE>
<CAPTION>
Dollars in Quarter Ended Year Ended
millions, except December 31, % December 31, %
per share amounts 1995 1994 Change 1995 1994 Change
- ---------------------------- ------- ------ ------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
EBITDA (#1) $1,059 $1,011 4.7 $4,220 $4,026 4.8
EBITDA margin 43.4% 43.5% - 44.5% 43.9% -
Capital
expenditures $816 $721 13.2 $2,739 $2,477 10.6
Return on equity (#2) 34.2% 40.6% - 35.6% 39.0% -
Debt-to-capital
ratio:
Communications Grp 66.0% 65.8% - 66.0% 65.8% -
Telephone
operations only 63.1% 60.9% - 63.1% 60.9% -
Employees:
Communications Grp 50,825 51,402 (1.1) 50,825 51,402 (1.1)
Telephone
operations only 47,934 47,493 0.9 47,934 47,493 0.9
Common shares
outstanding (#3) 473.6 469.3 0.9 473.6 469.3 0.9
Pro forma dividends
per share $0.535 $0.535 - $2.14 $2.14 -
Access lines
(thousands) (#4):
Business 4,299 4,079 5.4 4,299 4,079 5.4
Consumer 10,548 10,257 2.8 10,548 10,257 2.8
Total access lines 14,847 14,336 3.6 14,847 14,336 3.6
Billed access minutes
of use (millions):
Interstate 12,300 11,331 8.6 47,801 43,768 9.2
Intrastate 2,516 2,225 13.1 9,504 8,507 11.7
Total minutes of use 14,816 13,556 9.3 57,305 52,275 9.6
<FN>
<F1>
# 1: Earnings before interest, taxes, depreciation, amortization,
and other (EBITDA). EBITDA also excludes gain on asset sales.
<F2>
# 2: Based on income before extraordinary item.
<F3>
# 3: Effective November 1, 1995, each share of U S WEST, Inc.
common stock was converted into one share each of U S WEST Communi-
cations Group common stock and U S WEST Media Group common stock.
The common shares outstanding at December 31, 1994 are presented
on a pro forma basis and assumed to be equal to the common
shares outstanding for U S WEST, Inc.
<F4>
# 4: Access line growth excluding rural exchange sales was 4.2%.
</FN>
</TABLE>
<PAGE>
EXHIBIT 99A.3
COMBINED BALANCE SHEETS U S WEST COMMUNICATIONS GROUP
(UNAUDITED)
<TABLE>
<CAPTION>
Year Ended
December 31,
In millions 1995 1994
- ---------------------------------------- -------------------------
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $172 $116
Accounts and notes receivable 1,617 1,500
Inventories and supplies 193 166
Deferred tax asset 259 300
Other 51 56
-------------------------
Total current assets 2,292 2,138
-------------------------
Property, plant and equipment - net 13,529 13,041
Other assets 764 765
-------------------------
Total assets $16,585 $15,944
=========================
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt $1,065 $1,608
Accounts payable 851 888
Dividends payable 254 250
Other 1,437 1,462
-------------------------
Total current liabilities 3,607 4,208
-------------------------
Long-term debt 5,689 4,516
Postretirement and other postemployment
benefit obligations 2,351 2,427
Deferred taxes, credits and other 1,462 1,614
Communications Group equity 3,476 3,179
-------------------------
Total liabilities and equity $16,585 $15,944
=========================
</TABLE>
<PAGE>
EXHIBIT 99A.4
COMBINED STATEMENTS OF U S WEST COMMUNICATIONS GROUP
CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Year Ended
December 31,
In millions 1995 1994
- --------------------------------------------------------------------
OPERATING ACTIVITIES
<S> <C> <C>
Net income $1,176 $1,150
Adjustments to net income:
Depreciation and amortization 2,042 1,908
Deferred income taxes and amortization
of investment tax credits 172 226
Gain on sales of rural telephone exchanges (136) (82)
Postretirement medical and life costs,
net of cash fundings (90) (197)
Changes in operating assets and liabilities:
Restructuring payments (315) (279)
Accounts and notes receivable (117) (64)
Inventories, supplies and other (51) (29)
Accounts payable and accrued liabilities 7 (147)
Other - net 31 23
- --------------------------------------------------------------------
Cash provided by operating activities 2,719 2,509
- --------------------------------------------------------------------
INVESTING ACTIVITIES
Expenditures for property, plant and equipment (2,462) (2,254)
Proceeds from sales of rural telephone exchanges 214 93
Proceeds from (payments on) disposals of property,
plant and equipment (18) 3
Other - net (2) 2
- --------------------------------------------------------------------
Cash (used for) investing activities (2,268) (2,156)
- --------------------------------------------------------------------
FINANCING ACTIVITIES
Net (repayments of) proceeds from short-term debt (832) 344
Proceeds from issuance of long-term debt 1,647 326
Repayments of long-term debt (334) (285)
Dividends paid on common stock (926) (886)
Proceeds from issuance of equity 50 208
- --------------------------------------------------------------------
Cash (used for) financing activities (395) (293)
- --------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
Increase 56 60
Beginning balance 116 56
- --------------------------------------------------------------------
Ending balance $172 $116
====================================================================
</TABLE>
<PAGE>
EXHIBIT 99A.5
STATEMENTS OF INCOME U S WEST COMMUNICATIONS, Inc.
(UNAUDITED)
<TABLE>
<CAPTION>
Quarter Ended Year Ended
December 31, % December 31, %
In millions 1995 1994 Change 1995 1994 Change
- ------------------------------ ------- -------------- ------- -------
OPERATING REVENUES
<S> <C> <C> <C> <C> <C> <C>
Local service $1,113 $1,032 7.8 $4,344 $4,067 6.8
Interstate access 604 578 4.5 2,378 2,269 4.8
Intrastate access 189 188 0.5 747 729 2.5
Long-distance network 298 310 (3.9) 1,189 1,329 (10.5)
Other services 171 162 5.6 626 604 3.6
---------------- ----------------
Total operating revenue 2,375 2,270 4.6 9,284 8,998 3.2
---------------- ----------------
OPERATING EXPENSES
Employee-related 802 723 10.9 3,079 2,930 5.1
Other operating 428 454 (5.7) 1,587 1,653 (4.0)
Taxes other than
income taxes 72 84 (14.3) 371 378 (1.9)
Depreciation & amort. 523 481 8.7 2,022 1,887 7.2
---------------- ----------------
Total operating
expenses 1,825 1,742 4.8 7,059 6,848 3.1
---------------- ----------------
Income from operations 550 528 4.2 2,225 2,150 3.5
Interest expense 102 88 15.9 386 331 16.6
Gain on sales of rural
telephone exchanges 24 34 (29.4) 136 82 65.9
Other income
(expense) - net (15) 3 - (58) (20) -
---------------- ----------------
Income before income
taxes and extraordinary
item 457 477 (4.2) 1,917 1,881 1.9
Income taxes 155 179 (13.4) 698 706 (1.1)
---------------- ----------------
Income before extra-
ordinary item 302 298 1.3 1,219 1,175 3.7
Extraordinary item:
Early extinguishment
of debt, net of tax (3) - - (8) - -
---------------- ----------------
NET INCOME $299 $298 0.3 $1,211 $1,175 3.1
================ ================
</TABLE>
<PAGE> 1
EXHIBIT 99A.6
CONSOLIDATED STATEMENTS OF U S WEST, Inc.
INCOME (UNAUDITED)
<TABLE>
<CAPTION>
Quarter Ended Year Ended
December 31, % December 31, %
In millions 1995 1994 Change 1995 1994 Change
- ------------------------------ ------- -------------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
SALES & OTHER REVENUES $3,060 $2,839 7.8 $11,746 $10,953 7.2
OPERATING EXPENSES
Employee-related 1,089 957 13.8 4,071 3,779 7.7
Other operating 662 676 (2.1) 2,323 2,203 5.4
Taxes other than
income taxes 86 90 (4.4) 416 412 1.0
Depreciation & amort. 596 533 11.8 2,291 2,052 11.6
---------------- ---------------
Total operating expense 2,433 2,256 7.8 9,101 8,446 7.8
---------------- ---------------
Income from operations 627 583 7.5 2,645 2,507 5.5
Interest expense 123 119 3.4 527 442 19.2
Equity losses in
unconsol. ventures 79 38 - 207 121 71.1
Gain on merger of
joint ven. interest 157 - - 157 - -
Gains on asset sales:
Partial sale of joint
venture interest - 164 - - 164 -
Rural tele. exchanges 24 34 (29.4) 136 82 65.9
Paging assets - - - - 68 -
Guaranteed minority
interest expense 12 - - 14 - -
Other income
(expense) - net (30) 14 - (36) 25 -
---------------- ---------------
Income before income
taxes and extra-
ordinary item 564 638 (11.6) 2,154 2,283 (5.7)
Income taxes 208 229 (9.2) 825 857 (3.7)
---------------- ---------------
Income before extra-
ordinary item 356 409 (13.0) 1,329 1,426 (6.8)
Extraordinary item:
Early extinguishment
of debt, net of tax (3) - - (12) - -
---------------- ---------------
NET INCOME 353 409 (13.7) 1,317 1,426 (7.6)
Preferred dividends - - - 3 - -
---------------- ---------------
EARNINGS AVAILABLE FOR
COMMON STOCK $353 $409 (13.7) $1,314 $1,426 (7.9)
================ ===============
</TABLE>
<PAGE> 2
EXHIBIT 99A.6 (cont'd.)
CONSOLIDATED STATEMENTS OF U S WEST, Inc.
INCOME (UNAUDITED)
<TABLE>
<CAPTION>
Quarter Ended Year Ended
In millions, except December 31, % December 31, %
per share amounts 1995 1994 Change 1995 1994 Change
- ------------------------------ ------- -------------- ------ ------
COMMUNICATIONS GROUP:
<S> <C> <C> <C> <C> <C> <C>
Pro forma average
common shares
outstanding (#1) 472.6 460.1 2.7 470.7 453.3 3.8
================ ===============
Pro forma earnings per
common share: (#1)
Income before
extraordinary item $0.60 $0.65 (7.7) $2.52 $2.53 (0.4)
Extraordinary item (0.01) - - (0.02) - -
---------------- ---------------
Pro forma earnings
per common share $0.59 $0.65 (9.2) $2.50 $2.53 (1.2)
================ ===============
MEDIA GROUP:
Pro forma average
common shares
outstanding (#1) 472.0 460.1 2.6 470.5 453.3 3.8
================ ===============
Pro forma earnings per
common share: (#1)
Income available for
common stock before
extraordinary item $0.15 $0.24 (37.5) $0.30 $0.61 (50.8)
Extraordinary item - - - (0.01) - -
---------------- ---------------
Pro forma earnings
per common share $0.15 $0.24 (37.5) $0.29 $0.61 (52.5)
================ ===============
<FN>
<F1>
#1 Effective November 1, 1995, each share of U S WEST, Inc.
common stock was converted into one share each of U S WEST Communi-
cations Group common stock and U S WEST Media Group common stock.
Earnings per common share have been presented on a pro forma basis
to reflect the two classes of stock as if they were outstanding
since January 1, 1994. For periods prior to the recapitalization
the average common shares outstanding used in the earnings per
average common share for the two classes of stock are assumed to
be equal to the average common shares outstanding for U S WEST, Inc.
</FN>
</TABLE>
<PAGE> 3
EXHIBIT 99A.6 (cont'd.)
CONSOLIDATED STATEMENTS OF U S WEST, Inc.
INCOME (UNAUDITED)
<TABLE>
<CAPTION>
Dollars in millions, Quarter Ended Year Ended
except per share December 31, % December 31, %
amounts 1995 1994 Change 1995 1994 Change
- ------------------------------ ------- -------------- ------- ------
U S WEST, Inc.
<S> <C> <C> <C> <C> <C> <C>
Average common shares
outstanding (#1) - 460.1 - - 453.3 -
================ ================
Earnings per common
share (#1) - $0.89 - - $3.14 -
================ ================
SELECTED CONSOLIDATED DATA
U S WEST, Inc.
Capital $957 $862 11.0 $3,140 $2,820 11.3
expenditures
Debt-to-capital 50.7% 51.8% - 50.7% 51.8% -
ratio (#2)
Employees 61,047 61,505 (0.7) 61,047 61,505 (0.7)
<FN>
<F1>
#1 Effective November 1, 1995, each share of U S WEST, Inc.
common stock was converted into one share each of U S WEST Communi-
cations Group common stock and U S WEST Media Group common stock.
Average common shares and per common share data for 1995 are
presented on a Group basis only.
<F2>
#2 Ratio includes preferred securities as a component of
total capital. Including debt related to the net investment in
assets held for sale, the 1995 and 1994 ratios are 52.9% and
55.5%, respectively.
</FN>
</TABLE>
<PAGE>
EXHIBIT A.7
CONSOLIDATED BALANCE SHEETS U S WEST, Inc.
(UNAUDITED)
<TABLE>
<CAPTION>
Year Ended
December 31,
In millions 1995 1994
- --------------------------------------- -------------------------
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $192 $209
Accounts and notes receivable 1,886 1,693
Inventories and supplies 227 189
Deferred tax asset 282 352
Other 322 323
-------------------------
Total current assets 2,909 2,766
-------------------------
Property, plant and equipment - net 14,677 13,997
Investment in Time Warner Entertainment 2,483 2,522
Intangible assets - net 1,798 1,858
Investment in international ventures 1,511 881
Net investment in assets held for sale 429 302
Other assets 1,264 878
-------------------------
Total assets $25,071 $23,204
=========================
LIABILITIES AND SHAREOWNERS' EQUITY
Current liabilities:
Short-term debt $1,901 $2,837
Accounts payable 975 944
Dividends payable 254 251
Other payables 1,922 1,982
-------------------------
Total current liabilities 5,052 6,014
-------------------------
Long-term debt 6,954 5,101
Postretirement and other postemployment
benefit obligations 2,433 2,502
Deferred taxes, credits and other 2,033 2,154
Company-obligated mandatorily
redeemable preferred securities of
subsidiary trust holding solely Company-
guaranteed debentures 600 -
Preferred stock subject to
mandatory redemption 51 51
Common shareowners' equity:
Common shares 8,228 8,056
Cumulative deficit (115) (458)
LESOP guarantee (127) (187)
Foreign currency translation adjustments (38) (29)
-------------------------
Total common shareowners' equity 7,948 7,382
-------------------------
Total liabilities & shareowners' equity $25,071 $23,204
=========================
</TABLE>
<PAGE>
EXHIBIT 99A.8
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF U S WEST, Inc.
CASH FLOWS (UNAUDITED) Year Ended
December 31,
In millions 1995 1994
- ---------------------------------------------------------------------
OPERATING ACTIVITIES
<S> <C> <C>
Net income $1,317 $1,426
Adjustments to net income:
Depreciation and amortization 2,291 2,052
Deferred income taxes and amortization
of investment tax credits 274 373
Equity losses in unconsolidated ventures 207 121
Gain on merger of joint venture interest (157) -
Gain on partial sale of joint ven. interest - (164)
Gain on sales of rural telephone exchanges (136) (82)
Gain on sale of paging assets - (68)
Postretire. med. & life costs, net of cash fundings (24) (5)
Changes in operating assets and liabilities:
Restructuring payments (334) (289)
Accounts and notes receivable (169) (104)
Inventories, supplies and other (79) (81)
Accounts payable and accrued liabilities 54 (4)
Other - net 185 72
- ---------------------------------------------------------------------
Cash provided by operating activities 3,429 3,247
- ---------------------------------------------------------------------
INVESTING ACTIVITIES
Expenditures for property, plant and equipment (2,834) (2,603)
Investment in international ventures (681) (350)
Investment in Atlanta Cable Properties - (745)
Proceeds from disposals of property, plant & equip. 201 96
Proceeds from sale of paging assets - 143
Other - net (201) (119)
- ---------------------------------------------------------------------
Cash (used) for investing activities (3,515) (3,578)
- ---------------------------------------------------------------------
FINANCING ACTIVITIES
Net(repayments of) proceeds from short-term debt (1,281) 1,280
Proceeds from issuance of long-term debt 2,732 251
Repayments of long-term debt (1,058) (526)
Proceeds from issuance of trust
originated preferred securities 581 -
Dividends paid (929) (886)
Proceeds from issuance of common stock 87 364
Proceeds from issuance of preferred stock - 50
Purchase of treasury stock (63) (20)
- ---------------------------------------------------------------------
Cash provided by financing activities 69 513
- ---------------------------------------------------------------------
Cash (used for) provided by continuing operations (17) 182
- ---------------------------------------------------------------------
Cash (to) discontinued operations - (101)
- ---------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
(Decrease) Increase (17) 81
Beginning balance 209 128
- ---------------------------------------------------------------------
Ending balance $192 $209
=====================================================================
<FN>
<F1>
Note: Certain reclassifications within the financial statements have
been made to comform to the current year presentation.
</FN>
</TABLE>
3
END OF YEAR RESULTS
(MORE)
Release Date: February 12, 1996
Contact: Bruce Amundson (303) 793-6296
Lois Leach (303) 793-6355
U S WEST MEDIA GROUP REPORTS
DOUBLE-DIGIT REVENUE, EBITDA GROWTH
ENGLEWOOD, Co. - U S WEST Media Group (NYSE:UMG) today reported double_digit
revenue and EBITDA growth for the year ending December 31, 1995, as its
domestic cable, wireless and directory publishing operations all produced
solid results.
Adjusting for the purchase of MediaOne properties in Atlanta and the sale of
paging assets, Media Group reported:
- - Proportionate revenues of $5.1 billion, a 17 percent increase when
compared with 1994 results.
- - Proportionate EBITDA - earnings before interest, taxes, depreciation
and amortization - of $1.15 billion, a 17 percent increase when compared
with $986 million last year.
"I'm extremely pleased by the results produced by each of our lines of
business," said Chuck Lillis, U S WEST Media Group president and chief
executive officer. "The fact that so many of our businesses lead their
industry in key measurements demonstrates we have developed the right
strategies and are successfully executing them."
Lillis highlighted the performances of U S WEST Cellular, the company's
domestic cellular operation, and U S WEST Direct. U S WEST Cellular outpaced
industry growth rates for subscribers, EBITDA and net income. U S WEST
Direct, the directory publishing operation, led its industry in revenue growth
for the fifth consecutive year.
Media Group also reported solid subscriber growth from its domestic cable
properties and international ventures. MediaOne in Atlanta increased its
customer base by 6.7 percent, nearly twice the industry average. The number
of customers served by international ventures grew by more than 100 percent.
Net income for 1995 was $141 million. Excluding a gain on the TeleWest_SBC
CableComms merger, an extraordinary charge and expenses associated with the
targeted stock transaction, net income was $59 million. For the year, Media
Group reported pro forma earnings per share of 29 cents.
Results for individual lines of business during 1995 include the following
highlights.
WIRELESS
On a proportionate basis, U S WEST Cellular, Media Group's DOMESTIC WIRELESS
operation, finished the year with:
- - 1.34 million subscribers, a 64 percent increase when compared with 1994
results. The company's continued push into the consumer retail market
contributed to this strong growth.
- - Revenue from cellular service and equipment of $824 million compared
with $634 million last year for a 30 percent increase.
- - EBITDA of $231 million, a 55 percent increase when compared with
last year's $149 million.
- - EBITDA margin of 32 percent compared with 28 percent last year.
Media Group's INTERNATIONAL wireless joint ventures serve 308,000 subscribers
on a proportionate basis. This represents an 82 percent increase when
compared with last year.
- - The company's Eastern European wireless operations contributed
significantly to this increase, ending the year with 110,000 subscribers on
a proportionate basis. This represents a 67 percent increase when compared
with last year.
Media Group also operates, or has licenses to provide, wireless service in the
United Kingdom, India, Poland and Russia.
DIRECTORY AND INFORMATION SERVICES
Consolidated highlights for U S WEST Direct, Media Group's DIRECTORY
PUBLISHING BUSINESS, include:
- - Revenues of $1.03 billion, a six percent increase when compared with
$965 million in 1994.
- - EBITDA of $519 million, a nine percent increase from last year.
- - Net income of $307 million, a 10 percent increase when compared with
$279 million last year.
CABLE AND TELEPHONY
In DOMESTIC CABLE TV markets, Media Group served nearly three million
proportionate subscribers at year end. In addition to strong customer growth,
other highlights include:
- - MediaOne generated $215 million in revenue and $100 million in EBITDA.
- - Media Group's investment in the Time Warner Entertainment (TWE)
partnership generated $2.45 billion in proportionate revenue and $489
million in proportionate EBITDA.
In INTERNATIONAL CABLE TV markets, Media Group increased its proportionate
subscriber base to 696,000 customers compared with 226,000 last year.
Excluding the TeleWest_SBC merger, and purchase of the Czech and KTA cable
systems, this represents a 15 percent increase when compared with last year.
U S WEST Communications Group also released year end results today.
U S WEST Media Group is involved in domestic and international cable and
wireless networks, directory publishing and interactive multimedia services.
U S WEST Media Group is one of two major groups that make up U S WEST.
###
<PAGE> 1
EXHIBIT 99B.1
COMBINED STATEMENTS OF INCOME U S WEST MEDIA GROUP
(UNAUDITED)
<TABLE>
<CAPTION>
Quarter Ended Year Ended
December 31, % December 31, %
In millions 1995 1994 Change 1995 1994 Change
- ------------------------------ ------- ------ ------- ------ ------
SALES AND OTHER REVENUES
<S> <C> <C> <C> <C> <C> <C>
Multimedia content
& services $324 $301 7.6 $1,180 $1,075 9.8
Wireless communications 265 218 21.6 941 781 20.5
Cable & telecomm. 50 18 - 215 18 -
Other 10 12 (16.7) 38 34 11.8
------- ------- ------ -------
Total revenues 649 549 18.2 2,374 1,908 24.4
------- ------- ------ -------
OPERATING EXPENSES
Costs of sales 233 179 30.2 772 612 26.1
Selling, general and
administrative 252 265 (4.9) 886 763 16.1
Depreciation & amort. 68 45 51.1 249 144 72.9
------- ------- ------ -------
Total oper. expenses 553 489 13.1 1,907 1,519 25.5
------- ------- ------ -------
Income from operations 96 60 60.0 467 389 20.1
Interest expense 11 20 (45.0) 100 66 51.5
Equity losses in
unconsol. ventures 79 38 - 207 121 71.1
Gain on merger of
joint ven. interest 157 - - 157 - -
Gains on asset sales:
Partial sale of
joint ven. interest - 164 - - 164 -
Paging assets - - - - 68 -
Guaranteed minority
interest expense 12 - - 14 - -
Other income
(expense) - net (19) 14 - 5 46 (89.1)
------- ------ ------- ------
Income before income
taxes and extra-
ordinary item 132 180 (26.7) 308 480 (35.8)
Income taxes 60 70 (14.3) 163 204 (20.1)
------- ------ ------- ------
Income before extra-
ordinary item 72 110 (34.5) 145 276 (47.5)
Extraordinary item:
Early extinguishment
of debt, net of tax - - - (4) - -
-------- ------ ------- ------
NET INCOME 72 110 (34.5) 141 276 (48.9)
Preferred dividends - - - 3 - -
-------- ------ ------- ------
EARNINGS AVAILABLE FOR
COMMON STOCK $72 $110 (34.5) $138 $276 (50.0)
======== ====== ======= ======
</TABLE>
<PAGE> 2
EXHIBIT 99A.9
COMBINED STATEMENTS OF INCOME U S WEST MEDIA GROUP
(UNAUDITED)
<TABLE>
<CAPTION>
Quarter Ended Year Ended
In millions, except December 31, % December 31, %
per share amounts 1995 1994 Change 1995 1994 Change
- --------------------- ------- ------- ------ ------ ------- -------
<S> <C> <C> <C> <C> <C> <C>
Pro forma average
common shares
outstanding (#1) 472.0 460.1 2.6 470.5 453.3 3.8
======= ======= ====== =======
Pro forma earnings
per common share: (#1)
Income available
for common stock
before extraordinary $0.15 $0.24 (37.5) $0.30 $0.61 (50.8)
item
Extraordinary item - - - (0.01) - -
------- ------- ------ -------
Pro forma earnings
per common share $0.15 $0.24 (37.5) $0.29 $0.61 (52.5)
======== ======= ======= =======
<FN>
<F1>
#1: Effective November 1, 1995, each share of U S WEST, Inc.
common stock was converted into one share each of U S WEST Communi-
cations Group common stock and U S WEST Media Group common stock.
Earnings per common share have been presented on a pro forma basis
to reflect the two classes of stock as if they were outstanding
since January 1, 1994. For periods prior to the recapitalization
the average common shares outstanding used in the earnings per
average common share for the two classes of stock are assumed to
be equal to the average common shares outstanding for U S WEST, Inc.
</FN>
</TABLE>
- 4 -
<PAGE>
EXHIBIT 99B.2
SELECTED COMBINED GROUP DATA (UNAUDITED) U S WEST MEDIA GROUP
<TABLE>
<CAPTION>
Dollars in Quarter Ended Year Ended
millions, statistics December 31, % December 31, %
in thousands 1995 1994 Change 1995 1994 Change
- --------------------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
REVENUES
U S WEST Direct $266 $255 4.3 $1,026 $965 6.3
Other directories 58 46 26.1 154 110 40.0
MediaOne 50 18 - 215 18 -
NewVector:
Service 230 179 28.5 845 633 33.5
Equipment 35 39 (10.3) 96 120 (20.0)
Paging - - - - 28 -
---------------- -----------------
Total NewVector 265 218 21.6 941 781 20.5
Other 10 12 (16.7) 38 34 11.8
---------------- -----------------
Total revenues $649 $549 18.2 $2,374 $1,908 24.4
EBITDA (#1)
U S WEST Direct $135 $123 9.8 $519 $477 8.8
Other directories (19) (20) 5.0 (85) (51) (66.7)
MediaOne 26 5 - 100 5 -
NewVector:
Cellular 51 42 21.4 268 180 48.9
Paging - - - - 12 -
Other (29) (45) 35.6 (86) (90) 4.4
---------------- -----------------
Total EBITDA $164 $105 56.2 $716 $533 34.3
OTHER DATA:
U S WEST Direct (Yellow Pages)
Net Income $82 $72 13.9 $307 $279 10.0
Advertisers 479 468 2.4 479 468 2.4
MediaOne (Atlanta Cable)
Basic subscribers
served 527 494 6.7 527 494 6.7
Homes passed 848 814 4.2 848 814 4.2
Basic penetration 62.1% 60.7% - 62.1% 60.7% -
U S WEST NewVector (Wireless)
Subscribers
(consolidated) 1,463 968 51.1 1,463 968 51.1
Proportionate POPs
managed (millions) 20.0 18.5 8.1 20.0 18.5 8.1
<FN>
<F1>
# 1: Earnings before interest, taxes, depreciation, amortization
and other (EBITDA). EBITDA also excludes gains on asset sales,
equity losses and guaranteed minority interest expense.
<F2>
Note: Certain reclassifications have been made to conform to the
current year presentation.
</FN>
</TABLE>
<PAGE>
EXHIBIT 99B.3
COMBINED BALANCE SHEETS U S WEST MEDIA GROUP
(UNAUDITED)
<TABLE>
<CAPTION>
Year Ended
December 31,
In millions 1995 1994
- ---------------------------------------- -------------------------
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $20 $93
Accounts and notes receivable 287 212
Deferred directory costs 247 234
Receivable from Communications Group 106 109
Other assets 81 108
-------------------------
Total current assets 741 756
-------------------------
Property, plant and equipment - net 1,148 956
Investment in Time Warner Entertainment 2,483 2,522
Intangible assets - net 1,798 1,858
Investment in international ventures 1,511 881
Net investment in assets held for sale 429 302
Other assets 505 119
-------------------------
Total assets $8,615 $7,394
=========================
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt $836 $1,229
Accounts payable 235 170
Deferred revenue and customer deposits 87 76
Other payables 411 458
-------------------------
Total current liabilities 1,569 1,933
-------------------------
Long-term debt 1,265 585
Deferred taxes, credits and other 576 547
Postretirement and other postemployment
benefit obligations 82 75
Company-obligated mandatorily
redeemable preferred securities of
subsidiary trust holding solely Company-
guaranteed debentures 600 -
Preferred stock subject to
mandatory redemption 51 51
Media Group equity 4,599 4,390
Company LESOP guarantee (127) (187)
-------------------------
Total equity 4,472 4,203
-------------------------
Total liabilities and equity $8,615 $7,394
=========================
</TABLE>
<PAGE>
EXHIBIT 99B.4
COMBINED STATEMENTS OF U S WEST MEDIA GROUP
CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Year Ended
December 31,
In millions 1995 1994
- --------------------------------------------------------------------
OPERATING ACTIVITIES
<S> <C> <C>
Net income $141 $276
Adjustments to net income:
Depreciation and amortization 249 144
Equity losses in unconsolidated ventures 207 121
Gain on merger of joint venture interest (157) -
Gain on partial sale of joint ven. interest - (164)
Gain on sale of paging assets - (68)
Deferred income taxes and amortization
of investment tax credits 102 147
Changes in operating assets and liabilities:
Restructuring payments (19) (10)
Accounts and notes receivable (48) (40)
Deferred directory cost, prepaid and other (28) (52)
Accounts payable and accrued liabilities 45 143
Other - net 157 54
- --------------------------------------------------------------------
Cash provided by operating activities 649 551
- --------------------------------------------------------------------
INVESTING ACTIVITIES
Expenditures for property, plant and equipment (372) (349)
Investment in international ventures (681) (350)
Investment in PCS licenses (286) -
Investment in Atlanta Cable Properties - (745)
Proceeds from sale of paging assets - 143
Other - net 92 (121)
- --------------------------------------------------------------------
Cash (used for) investing activities (1,247) (1,422)
- --------------------------------------------------------------------
FINANCING ACTIVITIES
Net (repayments of) proceeds from short-term debt (449) 936
Repayments of long-term debt (724) (316)
Proceeds from issuance of long-term debt 1,085 -
Proceeds from issuance of trust originated
preferred securities - net 581 -
Proceeds from issuance of common stock 120 323
Proceeds from issuance of preferred stock - 50
Purchase of treasury stock (63) -
Dividends paid on preferred stock (3) -
Other - net (22) -
- --------------------------------------------------------------------
Cash provided by financing activities 525 993
- --------------------------------------------------------------------
Cash (used for) provided by continuing operations (73) 122
- --------------------------------------------------------------------
Cash (to) discontinued operations - (101)
- --------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
(Decrease) Increase (73) 21
Beginning balance 93 72
- --------------------------------------------------------------------
Ending balance $20 $93
====================================================================
<FN>
<F1>
Note: Certain reclassifications within the financial statements have
been made to conform to the current year presentation.
</FN>
</TABLE>
<PAGE>
EXHIBIT 99B.5
SELECTED PROPORTIONATE DATA (UNAUDITED) (1) U S WEST MEDIA GROUP
<TABLE>
<CAPTION>
Cable and Media Content
Dollars in Telecomm. Wireless and Services
millions Dom. (2) Int'l Dom. Int'l Dom. Int'l Total
- ------------- --------------- ------------- --------------- ------
QTR Ended
December 31, 1995
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues $755 $46 $240 $95 $274 $70 $1,480
EBITDA 149 (21) 37 (15) 104 10 264
Net income
(loss) (26) 54 (4) (4) 54 (2) 72
Subscribers/advertisers
(thousands) 2,945 696 1,339 308 479 165 5,932
QTR Ended
December 31, 1994 (3)
Revenues $607 $21 $183 $65 $267 $37 $1,180
EBITDA 93 (9) 36 (30) 95 (3) 182
Net income
(loss) (27) 97 5 (21) 58 (2) 110
Subscribers/advertisers
(thousands) 2,407 226 817 169 468 147 4,234
YTD December 31, 1995
Revenues $2,661 $128 $824 $295 $1,065 $142 $5,115
EBITDA 589 (55) 226 (40) 426 3 1,149
Net income
(loss) (72) 18 50 (80) 238 (13) 141
YTD December 31, 1994 (3)
Revenues $2,196 $85 $662 $186 $1,005 $79 $4,213
EBITDA 436 (42) 161 (68) 413 2 902
Net income
(loss) (42) 65 74 (68) 251 (4) 276
<FN>
<F1>
(1) Proportionate data reflects the Media Group's relative ownership
interest in revenues and EBITDA for both its consolidated and
equity method entities. Proportionate data is not required by GAAP
or intended to replace the Combined Financial Statements prepared
in accordance with GAAP.
<F2>
(2) Includes the Media Group's 25.51 percent pro-rata priority and
residual equity interests in reported TWE results.
<F3>
(3) Results include the Atlanta cable properties which U S WEST,
Inc. acquired in December 1994. 1994 results include the paging
operation which was sold in the second quarter. Paging
revenue, EBITDA and net income for the year was $28, $12 and $44.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000732718
<NAME> U S WEST, INC.
<MULTIPLIER> 1,000,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1995
<PERIOD-END> DEC-31-1995 DEC-31-1995
<CASH> 192 192
<SECURITIES> 0 0
<RECEIVABLES> 1,886 1,886
<ALLOWANCES> 0 0
<INVENTORY> 227 227
<CURRENT-ASSETS> 2,909 2,909
<PP&E> 32,884 32,884
<DEPRECIATION> 18,207 18,207
<TOTAL-ASSETS> 25,071 25,071
<CURRENT-LIABILITIES> 5,052 5,052
<BONDS> 6,954 6,954
<COMMON> 8,228 8,228
651 651
0 0
<OTHER-SE> (280) (280)
<TOTAL-LIABILITY-AND-EQUITY> 25,071 25,071
<SALES> 3,060 11,746
<TOTAL-REVENUES> 3,060 11,746
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 2,433 9,101
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 123 527
<INCOME-PRETAX> 564 2,154
<INCOME-TAX> 208 825
<INCOME-CONTINUING> 356 1,329
<DISCONTINUED> 0 0
<EXTRAORDINARY> (3) (12)
<CHANGES> 0 0
<NET-INCOME> 353 1,317
<EPS-PRIMARY> .59 2.50
<EPS-DILUTED> .59 2.50
</TABLE>
